Although we would hope that the majority of contracts are performed successfully, there are circumstances that arise where parties are put in a position where they need to recoup losses as a result of that non performance by the other party. Examples of this may include cases such as allowances for quality, rejection of the goods, failure to supply goods of the contract specification through to failure to supply the goods sold in a default position.
In GAFTA, FOSFA and AIC contracts the situation is clear as there is an arbitration clause incorporated into the terms and conditions.
In cases where no arbitration clause is incorporated into the contract, the parties can
agree to arbitration being the method of dispute resolution rather than resorting to court action.
The parties can both agree to arbitration even if other terms are incorporated. They can appoint Philip Noyce as a sole arbitrator under the Simple Arbitration Rules listed here. It is hoped that by keeping submissions and evidence to a minimum then the costs of the arbitration will not be disproportionate to the claim amount.
The party’s submissions will be exchanged on a short time period and can be by email and the result is a binding award containing short reasoning being available within 50 days from outset.
Some common questions are:
The scheme is an easy and transparent way for resolving small cost disputes in the agricultural commodity world and has been developed in mind to have a fixed cost if the arbitration expenses to produce a legally bind award by sole arbitrator. Essentially, it can be used as a method for resolving disputes if both parties agree to it being used.
The decision of the arbitrator is legally binding and enforceable through the Courts.
There is no limit on the amount of the claim but parties should note that the arbitration rules are condensed in order to deal with low cost, simple disputes. If the arbitrator considers, even after the exchange of documents, that the case is too complicated or contains too many contentions to be a simple dispute then he reserves the right to charge an additional amount by notice to the parties.
If the dispute is complicated then it may make sense to employ someone, not necessarily a solicitor, to prepare submissions on your behalf but there is fundamentally nothing to stop a party preparing their own statement of case.
If the parties to the dispute deliver their submissions on time and there is no other element involved, for example, disclosure, then after an initial seven day period for the arbitrator to accept the appointments, the exchange of statement of cases should be completed within thee weeks. After the closure of exchanges, an award is generally available within 21 days. The target for an award being published is 50 days after receipt of the arbitration agreement signed by both parties.
It is said that everybody wants their day in court. To keep the cost to a minimum, an oral hearing will only be held where both parties request that one be held. A single party can request an oral hearing but this is at the absolute discretion of the arbitrator.
These Rules apply to the Philip Noyce Associates Simple Arbitration Scheme
The object of the scheme is to provide a final and legally binding decision in the form of an award 50 days of the parties signing and returning the arbitration agreement. This is defined as when arbitration is commenced. The award is final and binding on the parties and there is no appeal procedure. If the arbitrator considers, even after the exchange of documents, that the case is too complicated or contains too many contentions to be a simple dispute then he reserves the right to charge an additional amount and will give such notice to the parties.
The arbitrator shall not be interested in the transaction directly or shall not be retained financially by any party to the arbitration.
The arbitration agreement form is available on request and must be completed by both parties who shall additionally provide a short outline of the dispute.
The Claimant, no later than 7 days, after the arbitration agreement has been signed and returned, shall make a deposit payment of £250.00 to the arbitrator.
The fixed fee for a dispute under these rules is £500.00 plus VAT at the applicable rate. If a hearing is granted then the arbitrator’s fee will be £150.00 per hour to include, but not limited to, the hearing time, and any travelling time, preparation time and disbursements. An additional deposit, at the arbitrator’s first request, shall be paid in the event of a hearing being provided. Any cancelled oral hearing will be charged at a daily rate.
The arbitrator shall issue a timetable at the time of accepting the appointment. The suggested timetable is that the Claimant serves their statement of case within seven days of the arbitrator’s acceptance.
The Respondent’s statement of defence shall be submitted within seven days of the Claimant’s Statement of Case.
The Claimant shall have a further seven days to serve their rejoinder which shall answer only new points raised by the Respondent. Following that, it will be the arbitrator’s intention to close exchanges and determine the matter. All notices and submissions shall be simultaneously copied to the other party and the arbitrator. Notices and documents can be submitted be email but it is recommended that a tracked and signed postal or courier service is used.
An oral hearing will only be held where both parties request that one be held. A single party can request an oral hearing but this is at the absolute discretion of the arbitrator. An additional deposit, at the arbitrator’s first request, shall be paid in the event of a hearing being provided. There shall be no representation at an oral hearing unless by the agreement of the parties.
It is for the Arbitrator to decide if a party can recover any costs of the arbitration from the other party including legal and/or representation costs.
When the award is ready for publication, the arbitrator will contact the parties and the award shall be released to both parties upon payment of the final amount due.
The Arbitration Act 1996 or any amendments or alternative substitute legislation shall apply to the arbitration and the Arbitrator shall have all the powers available to an Arbitrator under that Act. English law applies.
If the parties settle their dispute after commencing Arbitration, they must inform the Arbitrator immediately who will return any deposit to the Claimant which has not been used or inform the parties of any additional amount which is due to which the parties are jointly and severally liable.
These rules and the fixed fee may be revised from time to time. Any changes will not affect arbitrations already commenced unless the parties agree to apply them.